Riot Games, a subsidiary of Tencent Holdings, revealed plans to reduce its workforce by approximately 11 per cent, equating to 530 employees globally. The decision was conveyed through a blog post on Monday, accompanied by a letter from CEO Dylan Jadeja addressed to the company's staff.
Riot Games, headquartered in Los Angeles and renowned for its popular titles such as "League of Legends," emphasised that the primary impact of the layoffs would be felt by teams outside of core development. The move comes amid challenges faced by digital games publishers striving for growth, with audiences exhibiting reluctance to invest in expensive titles and opting for a more conservative approach in the face of escalating inflation. Last year, Electronic Arts responded to similar challenges by cutting 6 per cent of its workforce and relinquishing office space.
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Jadeja acknowledged the need for a more focused approach within the company, stating, "Today, we're a company without a sharp enough focus, and simply put, we have too many things underway. Some of the significant investments we've made aren't paying off the way we expected them to. Our costs have grown to the point where they're unsustainable."
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As a strategic shift, Riot Games aims to concentrate on its existing portfolio of live games, including "League of Legends," "Valorant," "Teamfight Tactics," and "Wild Rift." This decision was outlined in a separate blog post by Jadeja and co-founder Marc Merrill.
Further adjustments will involve discontinuing new game development under the "Riot Forge" initiative and implementing reductions in staff and features related to "Legends of Runeterra." Tencent, which acquired a majority stake in Riot Games in 2011, also holds stakes in other notable U.S. video game developers, such as Epic Games.